Question: On January l , 2020, Twist Corp. had

> The following information is for a copyright owned by Lighting Designs Corp., a private entity, at December 31, 2020. Lighting Designs Corp. applies ASPE. Assume that Lighting Designs Corp. will continue to use this copyright in the future. As at Decem

> Repeat El2.13, but now assume that the licence was granted in perpetuity and has an indefinite life, and that Dayton prepares financial statements in accordance with ASPE. At the end of 2020, Dayton Corporation owns a licence with a remaining life of 10

> Repeat El2.13, but now assume that the licence was granted in perpetuity and has an indefinite life. In El2.13 At the end of 2020, Dayton Corporation owns a licence with a remaining life of 10 years and a carrying amount of $530,000. Dayton expects undis

> Repeat El2.13, but now assume that Dayton prepares financial statements in accordance with ASPE, and that the recoverable amount under ASPE (undiscounted future cash flows) is calculated to be $500,000 at the end of 2021. In El2.13 At the end of 2020, D

> Andeo Corporation purchased a truck at the beginning of 2020 for $48,000. The truck is estimated to have a residual value of $3,000 and a useful life of 275,000 km. It wasdriven for 52,000 km in 2020 and 65,000 km in 2021. (a) Calculate depreciation expe

> Blue and White Town Taxi Incorporated applied for several taxi licences for its taxicab operations in the Town of Somerville and, on August 31, 2020, incurred costs of $12,500 in the application process. The outcome of applying for taxi licences in theto

> During 2020, Saskatchewan Enterprises Ltd., a private entity, incurred$4.7 million in costs to develop a new software product called Dover. Of this amount, $1.8 million was spent before the company determined that the product was technologically and fina

> Selected account information follows for Entertainment Inc. as at December 31, 2020. All the accounts have debit balances. Assume the company uses IFRS when preparing financial statement Instructions a. Identify which items should be classified as inta

> In early January 2020, Chi Inc., a private enterprise that applies ASPE, purchased 40% of the common shares of Washi Corp. for $410,000. Chi was now able to exercise considerable influence in decisions made by Washi's management. Washi Corp.'s statement

> On January 3, 2020, Mego Limited purchased 3,000 (30%) of the common shares of Sonja Corp. for $438,000. The following information is provided about the identifiable assets and liabilities of Sonja at the date of acquisition: During 2020, Sonja reported

> The following are two independent situations. Situation 1: Lauren Inc. received dividends from its common share investments during the year ended December 31, 2020, as follows: • A cash dividend of $12,250 is received from Peel Corporation. Lauren owns a

> On January l, 2020, Rae Corporation purchased 30% of the common shares of Martz Limited for $196,000. Martz Limited shares are not traded in an active market. The carrying amount of Martz's net assets was $520,000 on that date. Any excess of the purchase

> Harnish Inc. acquired 25% of the outstanding common shares of Gregson Inc. on December 31, 2019. The purchase price was $1,250,000 for 62,500 shares, and is equal to 25% of Gregson's carrying amount. Gregson declared and paid a $0.75 per share cash divid

> Holmes Inc. purchased 30% of Nadal Corporation's 30,000 outstanding common shares at a cost of $15 per share on January 3, 2020. The purchase price of $15 per share was based solely on the book value of Nadal's net assets. On September 21, Nadal declared

> Weekly Corp., a December 31 year-end company that applies IFRS, acquired an investment of 1,000 shares of Credence Corp. in mid-2016 for $29,850. Between significant volatility in the markets and in the business prospects of Credence Corp., the accountin

> Sierra Corporation had sales revenue of $5,850,000 and investment revenue of $227,000 for the year ended December 31, 2020. Other items pertaining to 2020 were as follows: Sierra has 100,000 common shares outstanding throughout the year. Prepare a single

> On January l, 2018, Mamood Ltd. paid $322,744.44 for 12% bonds of Variation Ltd. with a maturity value of $300,000. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2018, mature on January l , 2023, and pay interest each Dece

> Tsui Corporation owns corporate bonds at December 31, 2020, accounted for using the amortized cost model. These bonds have a par value of $800,000 and an amortized cost of $788,000. After an impairment review was triggered, Tsui determined that the disco

> In early 2020, for the first time, HTSM Corp. invested in the common shares of another Canadian company. It acquired 5,000 shares of Toronto Stock Exchange-traded Bayscape Ltd. at a cost of $68,750. Bayscape is projected to reach a value of $15.50 per sh

> Niger Corp. gave you the following information about its investment in Fahad Corp. shares purchased in May 2020 and accounted for using the FV-OCI method: Instructions a. Prepare the adjusting journal entries needed on December 31, 2020, 2021, and 2022.

> At the end of 2020, Dayton Corporation owns a licence with a remaining life of 10 years and a carrying amount of $530,000. Dayton expects undiscounted future cash flows from this licence to total $535,000. The licence's fair value is $425,000 and disposa

> Assume the same information as in E9.14 and also assume that the bond is the only investment held by Miron Aggregates Ltd. Instructions a. Prepare a partial comparative statement of financial position at December 31, 2020 and 2021, showing only the rela

> On July 1, 2020, Miron Aggregates Ltd. Purchased 6% bonds having a maturity value of $100,000 for $103,585. The bonds provide the bondholders with a 5% yield. The bonds mature four years later, on July 1, 2024, with interest receivable June 30 and Decemb

> Assume the same information as in E9.12, except that the bonds are carried at FV-OCI. The fair value of the bonds at December 31 of each year end is as follows: 2019……………..$320,500……………….2020…………………$309,000 Instructions a. Prepare the journal entries to

> Activet Corporation, a Canadian-based international company that follows IFRS, has the following securities in its portfolio of investments acquired for trading purposes and accounted for using the FV-NI method on December 31, 2019: In 2020, Activet comp

> NB Corp. purchased a $100,000 face-value bond of Myers Corp. on August 31, 2019, for $104,490 plus accrued interest. The bond pays interest annually each November 1 at a rate of 93. On November 1, 2019, NB Corp. received the annual interest. On December

> Mega Inc.'s manufacturing division lost $100,000 (net of tax) for the year ended December 31, 2020, and Mega estimates that it can sell the division at a loss of $200,000 (net of tax). The division qualifies for treatment as a discontinued operation. (a)

> Zang Services Inc. accounts for the lease of a truck. The lease includes a residual value guarantee at the end of the lease term of $16,000. Zang estimates that the likelihood that the residual value will be $16,000 has a 50% certainty. Zang feels that t

> Videohound Video Company, a sole proprietorship, had the following information for 2020: Instructions Calculate the net income for 2020.

> Your client, Danyleyko Leasing Company, is preparing a contract to lease a machine to Souvenirs Corporation for a period of 25 years. Danyleyko has an investment cost of $365,755 in the machine, which has a useful life of 25 years and no salvage value at

> Viavelo Inc. manufactures cycling equipment. Recently, the company's vice-president of operations has requested construction of a new plant to meet the increasing demand for the company's bikes. After a careful evaluation of the request, the board of dir

> LEW Company purchased a machine at a price of $100,000 by signing a note payable, which requires a single payment of $123,210 in two years. a. Assuming annual compounding of interest, what rate of interest is being paid on the loan? Use either a financia

> HQ Ltd. purchased a used truck from Trans Auto Sales Inc. HQ paid a $4,000 down payment and signed a note that calls for 36 payments of $1,033.34 at the end of each month. The stated rate of interest in the note is 4%. As an incentive for entering into t

> Nevine Corporation owns and manages a small 10-store shopping centre, which it classifies as an investment property. Nevine has a May 31 year end and initially recognized the property at its acquisition cost of $10.8 million on June 2, 2019. The acquisit

> Plaza Holdings Inc., a publicly listed company in Canada, ventured into construction of a mega shopping mall in Edmonton, which is rated as the largest shopping mall in North America. The company's board of directors, after much market research, decided

> On March 1 2020, Russell Winery Ltd. purchased a five-hectare commercial vineyard for $1,050,000. The total purchase price was based on appraised market values of the building, grapevines, and equipment ($580,000, $260,000, and $210,000, respectively). R

> Light stone Equipment Ltd. wanted to expand into New Brunswick and was impressed by the provincial government's grant program for new industry. Once it was sure that it would qualify for the grant program, it purchased property in downtown Saint John on

> Jamil Jonas is an accountant in public practice as a sole proprietor. Not long ago, Jamil struck a deal with his neighbor Ralph to prepare Ralph's business income tax and GST returns for 2020 in exchange for Ralph's services as a landscaper. Ralph provid

> Delray Inc. follows IFRS and has the following amounts for the year ended December 31, 2020: gain on disposal of FV-NI investments (before tax), $15,000; loss from operation of discontinued division (net of tax), $42,000; income from operations (before t

> Cannon Ltd. purchased an electric wax melter on April 30, 2020, by trading in its old gas model and paying the balance in cash. The following data relate to the purchase: Instructions Assuming that Cannon's fiscal year ends on December 31 and depreciat

> On September 1, 2020, Rupert Ltd. Purchased equipment for $30,000 by signing a two-year note payable with a face value of $30,000 due on September 1, 2022. The going rate of interest for this level of risk was 8%. The company has a December 31 year end.

> Native Inc. decided to purchase equipment from Central Ontario Industries on January 2, 2020, to expand its production capacity to meet customers' demand for its product. Native issued a $900,000, five-year, non-interest bearing note to Central Ontario f

> In early February 2020, Huey Corp. began construction of an addition to its head office building that is expected to take 18 months to complete. The following 2020 expenditures relate to the addition: On February 1, Huey issued a $100,000, three-year not

> The following three situations involve the capitalization of borrowing costs for public companies following IFRS. Situation 1 On January 1, 2020, Oksana Inc. signed a fixed-price contract to have Builder Associates construct a major head office facility

> On December 31, 2020, Omega Inc., a public company, borrowed $3 million at 12% payable annually to finance the construction of a new building. In 2021, the company made the following expenditures related to this building structure (unless otherwise noted

> The following transactions occurred during 2020. Assume that depreciation of 10% per year is charged on all machinery and 5% per year on buildings, on a straight-line basis, with no estimated residual value. Assume also that depreciation is charged for a

> On January 1, 2020, the accounting records of Sasseville Ltee included a debit balance of $15 million in the building account and of $12 million in the related accumulated depreciation account. The building was purchased in January 1980 for $15 million,

> On January l, 2020, Algo Ltd. acquires a building at a cost of $230,000. The building is expected to have a 20-year life and no residual value. The asset is accounted for under the revaluation model, using the asset adjustment method. Revaluations are ca

> A partial statement of financial position of Blue water Ltd. on December 31, 2019, showed the following property, plant, and equipment assets accounted for under the cost model (accumulated depreciation includes depreciation for 2019): Blue water uses

> Wen Corp., a public company located in Manitoba, both purchases and constructs various pieces of machinery and equipment that it uses in its operations. The following items are for machinery that was purchased and a piece of equipment that was constructe

> In fiscal 2020, Ivanjoh Realty Corporation purchased unimproved land for $55,000. The land was improved and subdivided into building Jots at an additional cost of $34,460. These building lots were all the same size but, because of differences in location

> Iqbal Corporation uses the lower of FIFO cost and net realizable value method on an individual item basis, applying the direct method. The inventory at December 31, 2019, included product AG. Relevant per-unit data for product AG follow: There were 1,0

> The net income per books of Russell Industries Limited was determined without any knowledge of the following errors. The 2015 year was Russell's first year in business. No dividends have been declared or paid. Instructions a. Prepare a work sheet to sh

> Eureka Limited has a calendar-year accounting period. The following errors were discovered in 2020. 1. The December 31, 2018 merchandise inventory had been understated by $51,000. 2. Merchandise purchased on account in 2019 was recorded on the books for

> At December 31, 2020, Igor Ltd. has outstanding non cancellable purchase commitments for 32,500 liters of raw material at $2.00 per liter. The material will be used in Igor's manufacturing process, and the company prices its raw materials inventory at co

> During 2020, Buildit Furniture Limited purchased a railway carload of wicker chairs. The manufacturer of the chairs sold them to Buildit for a lump sum of $59,850, because it was discontinuing manufacturing operations and wanted to dispose of its entire

> In an annual audit of Solaro Company Limited, you find that a physical inventory count on December 31, 2020, showed merchandise of $441,000. You also discover that the following items were excluded from the $441,000: 1. Merchandise of $61,000 is held by

> Jaeco Corporation asks you to review its December 31, 2020 inventory values and prepare the adjustments that are needed to the books. The following information is given to you: 1. Jaeco uses the periodic method of recording inventory. A physical count re

> The financial statements of Trifolium Corporation for fiscal 2018 to fiscal 2020 are as follows (in thousands): Instructions a. Calculate Trifolium's (1) inventory turnover and (2) average days to sell inventory for each of the two years ended in 2020

> Cyan Corporation is a manufacturer of paints and specialty coatings. In March 2020, Beck Inc. filed a lawsuit against Cyan Corporation for alleged patent infringement, claiming $1.1 million in damages. Cyan's lawyer disputed the claim, but in December 20

> Nicholas's Christmas Tree Farm Ltd. grows pine, fir, and spruce trees. The farm cuts and sells trees during the Christmas season and exports most of the trees to the United States. The remaining trees are sold to local tree-lot operators. It normally tak

> The inventory of 3T Company on December 31, 2020, consists of the following items. Instructions a. Determine the inventory as at December 31, 2020, by the lower of cost and net realizable value method, applying this method directly to each item. b. Det

> As a result of its annual inventory count, Tarweed Corp. determined its ending inventory at cost and at lower of cost and net realizable value at December 31, 2019, and December 31, 2020. December 31, 2019, was Tarweed's first year end. This information

> Information is presented in E8.l 7 on the inventory of mini-kettles at Funnell Company Limited for the month of May. Instructions a. Assuming that the perpetual inventory method is used, calculate the inventory cost at May 31 under each of the following

> Schonfeld Corporation began operations on December 1, 2019. The only inventory transaction in 2019 was the purchase of inventory on December 10, 2019, at a cost of $20 per unit. None of this inventory was sold in 2019. Relevant information for fiscal 202

> Two or more items are omitted in each of the following tabulations of income statement data for a business following ASPE. Instructions Fill in the amounts that are missing.

> The Ogale Equipment Corporation maintains a general ledger account for each class of inventory, debiting the individual accounts for increases during the period and crediting them for decreases. The transactions that follow are for the Raw Materials inve

> On April 1, 2020, Ibrahim Corporation assigns $400,000 of its accounts receivable to First National Bank as collateral for a $200,000 loan that is due mJuly 1, 2020. The assignment agreement calls for Ibrahim to continue to collect the receivables. First

> By December 31, 2020, Clearing Corp. had performed a significant amount of environmental consulting services for Rank Ltd. Rank was short of cash, and Clearing agreed to accept a $200,000, non-interest-bearing note due December 31, 2022, as payment in fu

> On July 1, 2020, Agincourt Inc. made two sales: 1. It sold excess land in exchange for a four-yea r, non-interest-bearing promissory note in the face amount of $1,101,460. The land's carrying value is $590,000. 2. It rendered services in exchange for an

> Environmental Corporation specializes in the production and sale of eco friendly packaging. In 2020, Environmental reported net income (earnings) in excess of analyst expectations. This included a significant gain on disposal of investments in the year a

> On September 1, 2020, Myo Inc. sold goods to Khin Corporation, a new customer. Before shipping the goods, Myo's credit and collections department conducted a procedural credit check and determined that Khin is a high credit-risk customer. As a result, My

> Little Corp. was experiencing cash flow problems and was unable to pay its $105,000 account payable to Big Corp. when it fell due on September 30, 2020. Big agreed to substitute a one-year note for the open account. The following two options were present

> At January 1, 2020, the credit balance of Andy Corp.'s Allowance for Doubtful Accounts was $400,000. During 2020, the bad debt expense entry was based on a percentage of net credit sales. Net sales for 2020 were $80 million, of which 90% were on account.

> At the end of 2020, Perez Corporation has accounts receivable of $2.5 million and an allowance for doubtful accounts of $120,000. On January 16, 2021, Perez determined that its $20,000 receivable from Morganfield Ltd. will not be collected, and managemen

> LeB!anc Inc. shows a balance of $519,289 in the Accounts Receivable account on December 31, 2020. The balance consists of the following: Instructions Show how the information above should be presented on the SFP of LeBlanc Inc. at December 31,2020.

> Eli Corp. has just received its August 31, 2020 bank statement, which is summarized as follows: The general ledger Cash account contained the following entries for the month of August: Deposits in transit at August 31 are $3,800, and cheques outstand

> Kali Corp. established a petty cash fund early in 2020 to increase the efficiency of accounting for small cash transactions and to improve control over many of the small expenditures it makes. The company decided to set up the imprest fund at $500 and a

> The Becker Milk Company Limited, a real estate and investment management company, reports the following information in its financial statements for the years ended April 30, 2017, 2016, and 2015: Instructions a. Calculate the accounts receivable turnov

> Lute Retail Ltd. Follows ASPE. It transfers $355,000 of its accounts receivable to an independent trust in a securitization transaction on July 11, 2020, receiving 96% of the receivables balance as proceeds. Lute will continue to manage the customer acco

> Chessman Corporation factors $600,000 of accounts receivable with Liquidity Financing, Inc. on a with recourse basis. Liquidity Financing will collect the receivables. The receivable records are transferred to Liquidity Financing on August 15, 2020. Liqu

> Several of Kimper Corporation's major customers experienced cash flow problems in 2020, mainly due to their increasing labour and production costs in 2019 and 2020. As a result, Kimper's accounts receivable turnover ratio (net sales revenue/average trade

> The controller for Fashion Co. is trying to determine the amount of cash to report on the December 31, 2020 statement of financial position. The following information is provided: 1. A commercial savings account with $600,000 and a commercial chequing ac

> Uddin Publishing Co. publishes college textbooks that are sold to bookstores on the following terms. Each title has a fixed wholesale price, terms f.o.b. shipping point, and payment is due 60 days after shipment. The retailer may return a maximum of 30%

> Organic Growth Company is testing a number of new agricultural seeds that it has recently harvested. To stimulate interest, it has decided to grant five of its largest customers the unconditional right to return these products if not fully satisfied. The

> Aaron's Agency sells an insurance policy offered by Capital Insurance Company for a commission of $100. In addition, Aaron will receive a further commission of $10 each year for as long as the policyholder does not cancel the policy. After selling the po

> Blair Biotech enters into a licensing agreement with Pang Pharmaceutical for a drug under development. Blair will receive a payment of $10,000 if the drug receives regulatory approval. Based on prior experience with the drug-approval process, Blair deter

> Presented below are four revenue recognition situations. I. Grupo sells goods to MTN for $1 million, payment due at delivery. 2. Grupo sells goods on account to Grifols for $800,000, payment due in 30 days. The terms are f.o.b. destination. 3. Grupo sell

> Celie Inc. manufactures and sells computers that include an assurance type warranty for 90 days. Celie offers an optional extended coverage plan under which it will repair or replace any defective part for three years from the expiration of the assurance

> On December 31, 2020, Grando Company sells production equipment to Fargo Inc. for $50,000. Grando includes a one-year assurance warranty service with the sale of all its equipment. The customer receives and pays for the equipment on December 31, 2020. Gr

> Zagat Inc. enters into an agreement on March 1, 2020, to sell aluminum ingots for $200,000 cash to Werner Metal Company. As part of this agreement, Zagat also agrees to repurchase from Werner the ingots in 60 days at the original sales price of $200,000

> Cramer Corp. sells idle machinery to Enyart Company on July 1, 2020, for $40,000. Cramer agrees to repurchase this equipment from Enyart on June 30, 2021, for a price of $42,400 (an imputed interest rate of 6%). Instructions a. Prepare the journal entry

> In 2020, Renato Corp. had cash receipts from customers of $152,000 and cash payments for operating expenses of $97,000. At January 1, 2020, accounts receivable were $13,000 and total prepaid expenses were $17,500. At December 31, 2020, accounts receivabl

> To increase sales, Letourneau Inc., a public company following IFRS, implemented a customer loyalty program that rewards a customer with one loyalty point for every $30 of merchandise purchased. Each point is redeemable for a $2.50 discount on any purcha

> Revenue Recognition under Earnings Approach-Various Consumer Industries Instructions a. Explain the principles and criteria for revenue recognition under the earnings approach. b. For each scenario noted in E6.l, discuss when revenue should be recognized

> Omega Pharmaceuticals Inc. licenses its patent rights for North America to an approved drug compound for five years to Crane Distributing Ltd. Omega determines that the patented drug formula has significant stand-alone value. Under the terms of the licen

> On May 1, 2020, Richardson Inc. entered into a contract to deliver one of its specialty mowers to Kickapoo Landscaping Co. The contract requires Kickapoo to pay the contract price of $900 in advance on May 15, 2020. Kickapoo pays Richardson on May 15, 20

> On January 1, 2020, Gordon Co. enters into a contract to sell a customer a wiring base and a shelving unit that sits on the base in exchange for $3,000. The contract requires delivery of the base first but states that payment for the base will not be mad

> Refer to the revenue arrangement in E6.16. Data of E6.16: Instructions Repeat requirements (a) and (b), assuming Crankshaft does not have market data with which to determine the stand-alone selling price of the installation services. As a result, an e

> Crankshaft Company manufactures equipment. Crankshaft's products range from simple automated machinery to complex systems containing numerous components. Unit selling prices range from $200,000 to $1.5 million, and are quoted inclusive of installation. T